Tag Archives | credit bubble

One of the great myths of modern times is that China is now full of middle class people with Western levels of consumption. Nothing could be further from the truth. Annual per capita incomes have certainly soared over the past two decades. But the main impact has been to lift people out of absolute poverty, […]

China has been primarily responsible for driving global growth since the Crisis began in 2008. Auto sales, for example, would have seen negative growth world-wide without China. And auto manufacturing is the world’s largest manufacturing industry. The chemical industry has been in a similar position. Whilst China is also now responsible for nearly 50% of global […]

Last week the US Federal Reserve announced the second move in its so-called tapering process, and reduced its bond buying by another $10bn/month. But there was only a temporary repeat in stock markets of the enthusiastic response to its first reduction in December. We are thus about to test whether the blog’s theory of ‘two steps and a […]

Demographics drives demand. If it doesn’t, then its hard to think what does. So forecasting economic growth depends on two key variables: If you have lots of young people in your adult population, then you should have fast growth If you have lots of older people, then you will be lucky to have any growth […]

Imagine for a moment that you had become president or premier of China following the leadership transition in March. You know that the country’s economic model has to change. But you also know that you have to carefully develop your powerbase, whilst also putting in place new policies. Probably you would take things cautiously at […]

The most important event of the past week, and possibly of the whole year, was Wednesday’s decision by the US Federal Reserve to finally “taper” its vast stimulus effort – now worth $4tn, nearly 25% of US GDP. The timing was no great surprise. The blog was convinced Ben Bernanke would want to start the process […]

Investing in today’s financial markets is relatively easy. You simply have to believe that governments in the US, Japan and Europe will continue to provide plenty of free cash to investors as part of their Recovery Scenario of a quick return to ‘normal growth’. It doesn’t matter whether the investor believes in the Scenario, the driver is simply the fear of […]

The best view is always from the top of the mountain. At least that is how it feels today, with this month’s IeC Boom/Gloom Index (blue column) hitting a record high. Nor it is alone, as the S&P500 (red line), the world’s most important financial market index is also at record levels. Central banks broke […]

It was only a “mini-stimulus” that was delivered by China’s new leaders in July. Well, thank goodness it wasn’t more, to judge by the above chart from Albert Edwards at SocGen. It shows how house price inflation has jumped in 69 of China’s 70 main cities between March and September: In March (orange column) inflation […]

Autos are now the largest single manufacturing industry in the world. Not only do they directly and indirectly employ vast numbers of people, but they are also increasingly key to consumer spending. Thus it is no surprise that governments have tried to increase auto sales since the Crisis began in 2008. China is the prime example of […]

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Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry.

The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such as oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts.

Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.